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Significant Changes Coming to Senate Patent Reform Bill

The Senate Judiciary Committee did hold a meeting this morning discussing several appointments pending before the Committee and pending patent reform legislation. The meeting was quite brief, lasting less than 30 minutes, presumably because there is an important mark-up meeting regarding the Budget. According to Senator Leahy, the Chairman of the Senate Judiciary Committee, Senators will once again meet regarding patent reform on Tuesday, March 31, 2009.

There were several minor, technical amendments made to the patent reform bill during the Executive Meeting today, but no major or significant changes were made. There will be news coming out of this meeting though, particularly Senator Leahy promising that there will be a patent bill this year, and soon. Senator Specter explaining that Senators are very close to a compromise and the changes may be “very significant,” Senator Hatch explaining that it will be impossible for everyone to be happy and, most importantly perhaps, Senator Feinstein explaining that as long as the bill favors only high-tech companies it has no chance of passing the full Senate. It is significant to note that Senators Specter and Feinstein seem to be on the same page, and Senator Hatch seemed somewhat upset and put off by the fact that consensus is desired, which could signal that high-tech will not be getting their wish list after all.

Below is what the Senators had to say about patent reform. This is not a “full” transcript. I did not type up all of the chit-chat between the Senators, and the transitional comments between speakers. Nevertheless, this is a true and accurate record of what each of these Senators had to say earlier today.

Senator Arlen Specter (R-PA)

I want to join in the seeking approval of the amendment, which is technical, and I am pleased to note that the discussions appear to be moving toward a fruitful perhaps resolution. I don’t want to be too optimistic until we know a little bit more, but there has been significant progress made. I would put interested parties, stakeholders on notice that we may be coming close to what would be an agreement. Before it is finalized I would want to know what everybody thinks. Those following the issue be on notice that there may be very significant modifications made and that the members may be looking for an agreement, and before I am going to sign off I want to give an opportunity to stakeholders and interested part to be heard. So be on notice to follow the proceedings. We cannot communicate with the world on it so let us know what you think about it especially if you have an objection.

Senator Patrick Leahy (D-VT)

Let me underscore what Senator Specter said. We do intend to finish the patent bill. It won’t be today but we will complete a patent bill relatively soon in this Committee and it will then go to the floor of the Senate. It will be the first major overhaul in 50 years and so if anybody is waiting to see well wait a little longer and see what happens, a little longer is now.

Senator Diane Feinstein (D-CA)

I’d like to make a brief statement about the patent bill and I would like to thank you for your leadership and work on this bill. It is not an easy subject to tackle. I want you to know that I applaud the goals of the bill and that is to modernize the patent system and harmonize the United States patent system with the rest of the world both are important and both need to be done at the same time I believe more work needs to be done as I said previously this bill looms large for California because all of the constituencies that are going to be impacted by the legislation are in California as they are in many other States. We have a thriving high-tech industry with many of the country’s largest tech companies like Intel, Hewlett Packard, Cisco and Apple, as well as many of the country’s smallest start-up ventures. We are also home to numerous cutting-edge biotech and drug industries. For example, Amgen has been a leader in the biotech industry and its therapeutics have changed the practice of medicine helping millions around the world fight against serious illness.

We also have many innovative and creative individuals like Steve Perlman who holds over 80 patents and whose work has been built into iPhones, video iPods, Macs and PCs. And, of course, California Universities are leading the way in discovering the new inventions of tomorrow. The University of California as a whole has developed more than 2,600 inventions in the past decade which have lead to new technologies and products and its researchers create an average of three new inventions per day. So this is an incredibly diverse State with many dynamic and innovative organizations and individuals. With this diversity comes an even greater responsibility to try and balance the competing needs of industries and individuals that rely on the patent system.

The differing business models, and I think this is important, and the diversity in the types of products that are being developed means that any changes in the patent system could have major unintended consequences. In addition, patent law is extremely complicated and in my view rather obtuse. For these reasons, I believe the bill can only move through the Senate once a balance among competing interests is achieved, and I don’t believe we are there yet.

In the last Congress I voted with Chairman Leahy to move the patent bill through the Committee to help push the bill forward, but I said at the time that I thought more work was needed to be done before the bill was ready for consideration by the full Senate. At the time I discussed several outstanding issues that bio-tech, pharmaceutical companies, small inventors and the Universities felt would harm their ability to protect their patents and among these, the elephant in the room, was and is damages. The bad news is the issue of damages has yet to be resolved, the good news is that my colleagues and I remain committed to finding a solution, and a solution means finding a true compromise. And I want to be clear on this point – compromise is never easy and it entails no one side getting everything it wants.

Up to now I have been very concerned that the high-tech community has not demonstrated a willingness to move from its original position on damages. In 2007, I first circulated legislative language, which I believe represented a reasonable middle ground. Unfortunately, there was silence from the high-tech community, although the other interests indicated their support of that amendment. Then last month Chairman Leahy held a very helpful hearing on patents and the witnesses were asked about damages and what legislative language could be agreed upon by all sides. At that time we also discussed codifying the 15 Georgia Pacific factors that courts have used to assess damages. Across the board the witnesses expressed broad agreement for legislation that examined the economic value of an invention and ensured that the court required substantial evidence.

Following the hearing I re-circulated the damages language I had from 07 and I circulated a new draft amendment on damages that incorporated the gatekeeper function for the judge and codified Georgia Pacific. It appears this new amendment got the attention of the high-tech community and I am now, thankfully, getting some feedback. I understand that high-tech is opposed to codifying the Georgia Pacific factors and others have expressed concern about the courts maintaining flexibility to use other factors beyond those 15, and I agree with that and I am willing to make changes and I am not wedded to codifying Georgia Pacific.

With that said, I do believe the language that I circulated last Congress represents a fair middle ground and should serve as the basis for a compromise on damages. We have re-circulated the 07 on damages now. We have not circulated the amendment codifying Georgia Pacific. So, bottom-line, I look forward to working with Chairman Leahy, Senator Specter and all the members of this Committee who have interest in this issue to develop a solution, but I’d like to say this – I do not believe the bill can pass the Senate unless it maintains a balance, unless it satisfies the basic patent needs of all of the industries that use the patent process.

Senator Orrin Hatch (R-UT)

This is truly landmark legislation and it will go a long way towards spurring on patents. Like I say, its been more than 50 years since we have had a major overhaul of the patent system and its about time that we do and we want to spur innovation, create jobs and reduce litigation. If we can do that through this bill that will help almost everybody, but there is no way we are going to be able to please everybody with this bill. We all know it.

Gene is a US Patent Attorney, Law Professor and the founder of IPWatchdog.com. He teaches patent bar review courses and is a member of the Board of Directors of the United Inventors Association. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, CNN Money and various other newspapers and magazines worldwide

The Author

Gene Quinn
is a patent attorney and the founder of IPWatchdog.com. He is also a principal lecturer in the PLI Patent Bar Review Course, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam.

Gene’s particular specialty as a patent attorney is in the area of strategic patent consulting, patent application drafting and patent prosecution. He has worked with independent inventors and start-up businesses in a variety of different technology fields.

Gene is admitted to practice law in New Hampshire, is a Registered Patent Attorney licensed to practice before the United States Patent Office and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. As a patent attorney he is able to represent inventors and businesses seeking patents across the United States.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 1 Comment comments.

moelarryMarch 30, 2009 9:41 am

per Feinstein- “I applaud the goals of the bill and that is to modernize the patent system and harmonize the United States patent system..”

But the US has led the world in technology for decades. Why then would we want to change our system to bring it in line with those we have led?

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